How does service innovation influence the performance of a company?

Starbucks has not only established itself in the coffee industry but essentially it has become its own entertainment business, by constantly innovating it has added to the customer experience by incorporating music into the stores to create an emotional response for customers and to allow them to feel a certain way when they enter the stores. At a shareholder meeting it was declared that a deal was signed with Paul McCartney that his songs where to be played in Starbucks stores, this suggests that Starbucks is not only limiting itself to one industry but branching out in different ways to ensure that services are constantly being improved. Shultz stated that, “Nothing is being taken away from the coffee business, it is just complimenting it,” this suggests that constant focus is on innovation and global expansion. Another value added service Starbucks introduced was the accessibility of a drive through store, this makes it easier for busy customers on the go to grab their favourite Starbucks drink without the inconvenience of parking and then making their way into the store.

I feel as though this was a very innovative implementation, however I also believe it is taking away from the initial essence of why Starbucks was created in the first place. So much effort has gone into providing the best customer service in store from the seating to the music and with the drive through, it contradicts the services provided in store where they want customers to stay, sit and relax. On the other hand, it caters to customers who haven’t got that amount of time to spend in stores, Starbucks needs to ensure that the brand as a whole doesn’t mask the actual experience by adding all these new innovations. An important aspect to be considered is what type of people are employed, because in essence employees are the first and only form of contact and they also add to the experience, therefore it is...

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